This article was originally on GET.com at: EC vs Condo - Which One Suits You Best?
In Singapore, Executive Condos (ECs) and condos almost can't be told apart by just the way they look. If you don't know much about what an EC is, it's basically a hybrid between an HDB flat and a private condo. Most of the time ECs look almost exactly like condos, but they are actually still constrained by HDB rules and regulations.
ECs were initially built for Singaporeans who earn a combined income of $12,000 to $14,000, which surpasses the income ceiling to be eligible for a HDB flat. That means that if you fall under this category, then you have to consider buying either an EC or a condo.
If you're weighing out your options between the two, GET.com has come up with 3 reasons why an EC could suit you and 4 reasons why a condo could suit you.
3 reasons why an EC could suit you
1. Pay less mortgage
One of the more obvious reasons to why people go for ECs instead of condos is simply because of the price. ECs are relatively cheaper compared to condos.
For example, let's take the newly launched condo Jewel @ Buangkok and The Vales EC. Even though both of these developments are in the Sengkang area and are only 2km apart from one another, their prices are very different.
A new sale strata unit that's 775 sq ft costs $921,750 at Jewel while a unit with the exact same sq ft at The Vales EC costs $626,620. This translates their respective psf (price per square foot) to be $1189 and $809, which makes a huge difference when it comes to paying the mortgage.
However, in terms of paying for the properties through home loans, unlike an HDB, you won't be able to pay with an HDB loan. Instead, you'll have to pay with a bank home loan. While you're at it, you can consider these 4 things to consider when comparing home loans.
2. If you want to be eligible for CPF grants
As mentioned before, an EC is still constrained to the rules and restrictions under HDB. But being under its constraint also means being eligible to the benefits that come with it.
The two grants available are the Family Grant or the Half-Housing Grant. As long as you are eligible for the grant or if any of your co-applicants are eligible, you can apply for the grants when booking your EC.
The screenshot below shows how much you're eligible for according to your average gross monthly household income. If you want a more detailed breakdown, here's everything you need to know about HDB grants.
Unfortunately though, if you're applying under the Joint Singles Scheme, these grants won't be applicable to you.
3. If you have a big family
ECs are generally bigger than condos because they were made to house families. In fact, plenty of ECs now offer dual-key units for those who are in a multi-generational family.
Plus, it's a known fact that condos are getting smaller and smaller. So if you weigh out your options properly, buying a property that's bigger will definitely be more practical for you if you have a family.
To put things in perspective, instead of paying for a 775 square foot (sq ft) shoebox unit at Jewel @ Buangkok which costs $921,750, for almost the same amount of money ($920,000) you can get a 1270 sq ft strata unit at The Vales EC.
4 reasons why a condo could suit you
1. If you're single
As much as there is the joint singles scheme available for singles to buy an EC, there is still a minimum age requirement of 35 years old before you can buy a property.
Even though you won't be able to buy an EC, if you're single and below the age of 35 you are still able to buy a condo. That's because condos do not have a minimum age at which you are permitted to buy them.
The only catch is that you have to be able to afford and sustain the condo on your own.
2. If you want to earn rental income (investment)
Unlike an EC, where you have to fulfil a Minimum Occupation Period (MOP) of 5 years, once you buy a condo, you can choose what you want to do with it immediately.
Sometimes, Singaporeans buy a condo as a second property to rent out for some side income. The good thing is, you don't have to live in the condo that you're renting.
If buying a condo is a form of investment to you too, then at least you know it's immediately yours once you buy the property. If you were to buy an EC, it can only become a private property after at least 10 years.
Be sure you've taken note of these 5 important things to know about renting out your home in Singapore before taking the steps to renting your place. You can also check out these 4 tips for renting out your existing rooms.
3. If you want more location options
Generally there are less EC developments than condo developments, making condos more readily available across the island than ECs.
If buying a home in a convenient location is important to you, condos are probably more suitable for you.
4. If status matters to you
Can you afford a $1.5 million condo? If your answer is yes, then great. But if your answer is no and you desperately want it to be a yes, for reasons like your status or showing off, sorry to break it to you but you might be a snob when it comes to money.
Buying a condo is a big investment and it will affect your finances drastically, so don't buy one on a whim or just because everyone else is doing it. Showing people that you have money isn't going to do much for your personality, especially since deep down we all know that money really isn't everything.
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